Analyst Concall
SBI Life sees total GST impact of 80 bps on margin in H1
This story was originally published at 20:41 IST on 24 October 2025
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--SBI Life: Share of unit linked plans at 62% vs 70% year ago
--CONTEXT: Comments by SBI Life management at post-earnings analyst concall
--SBI Life: Protection segment to benefit most from GST cut
--SBI Life: Total GST impact on new business margin to be 80 bps in H1
--SBI Life: Total GST impact on new business margin to be 20-30 bps in H2
--SBI Life: Retain margin guidance at 26-28%
--SBI Life: See FY26 individual annualised premium equivalent growth 13-14%
By Kabir Sharma and Shubham Rana
MUMBAI – SBI Life Insurance Co. Ltd. expects an impact of 80 basis points on its value-of-new-business margin in the first half of the current financial year owing to the cut in goods and services tax rates, the management said in a post-earnings call with analysts Friday. Similarly, an impact of 20-30 bps is expected on the margins in the second half of the year ending Mar. 31. Value of new business improved 14% on year to INR 27.5 billion in Apr-Sept, while the new business margin improved to 27.8% from 26.8% a year ago.
"Our financial performance reflects the transitional impact of revised GST rates on life insurance premiums, which led to increased GST expenses and some pressure on profitability," the management said. The GST Council last month reduced the GST paid by individuals on life and health insurance premiums to nil from 18%.
However, by the end of the financial year, the company may be able to offset the impact of the GST changes, the management said. "What we're saying is that if the product mix remains there, we'll continue to get the profile mix, and that will more or less offset the impact of GST," it said. The insurer has retained guidance for margins at 26-28% for the current financial year.
The protection unit stands to benefit the most from the cut in GST, the management said. "We continue to maintain a strong focus on the protection business, which remains a key pillar of our growth strategy...," it said. "With the recent GST reduction, the most benefited segment will also be the protection segment. So we expect that going forward, the growth in protection segment will be even higher."
Speaking of the share of unit-linked plans, the insurer said it had fallen to 62% at the end of September. "We don't expect that there will be compression on the ULIP (unit-linked insurance plan) margin. In fact, we expect the unit margin to slightly go up, given the product that we launched has a longer-term premium," the management said.
SBL Life reported a net profit of INR 4.95 billion for the September quarter, down 6.6% on year. The bottom line fell 16.8% sequentially. The company announced its results just before the market closed. Shares of the insurer ended 0.7% lower at INR 1,839.80 on the National Stock Exchange. End
Reported by Kabir Sharma
Edited by Rajeev Pai
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